Untenable and unsustainable IDR costs are driving up premiums for employers and employees, and new data from researchers at Georgetown University uncovers how out-of-network providers’ abuse and misuse of arbitration has become a $22 billion affordability crisis.
Highlights from the research are included below:
IDR’s deeply flawed incentives drive excessive volume and costs.
- “…The IDR system has resulted in total costs of $22.4 billion from 2022 to 2025. This includes $15.6 billion in payment amounts awarded by IDR entities that exceed in-network rates; $4.2 billion in internal administrative costs; and $2.7 billion in IDR administrative and entity fees.”
- “These escalating costs are driven by the sheer volume of disputes (which rose by 77 percent from 2024 to 2025) and higher payment amounts (which rose by 264 percent from 2024 to 2025).”
- “While dispute volume was up 77 percent from 2024 to 2025, total awards rose by 264 percent, more than triple the volume growth. The gap between these rates, as well as the rapid growth in the large awards in the 90th percentile of disputes, points to the influence of more disputes with unusually high-dollar awards. Many of these disputes are filed by surgeons, assistant surgeons, and neurologists—none of whom were the primary targets of surprise billing protections.”
- “The evidence presented here suggests that providers have a clear incentive to keep filing disputes and to ask for higher and higher amounts. To date, there is no evidence that there is any ceiling on the amount requested by providers that are deemed by IDR entities to be the superior offer.”
IDR is a profit generator for certain private equity-backed providers and IDR firms.
- “Similar to our prior analysis, the IDR process is dominated by a handful of provider organizations, many of which are backed by private equity or have other conflicted profit interests. Providers also continue to overwhelmingly prevail in the IDR process, winning about 85 percent of all IDR disputes in 2025 with a median award of more than four times the qualifying payment amount (QPA).”
- “In 2025, over three-fourths of resolved dispute lines…came from the following three organizations:
- Radiology Partners (30 percent), a large national radiology practice group with private-equity backing;
- HaloMD (27 percent), a middleman organization that files disputes on behalf of providers; and
- TeamHealth (20 percent), a multispecialty provider group with private-equity backing.”
IDR entities have a clear financial stake in aligning with providers and pushing disputes through IDR.
- “As we’ve previously written, IDR entities are paid on a per-dispute basis––and are not paid for ineligible disputes––and thus have a financial incentive to deem disputes eligible and rule in favor of providers to drive further volume.”
- “IDR entities that more often rule in favor of providers are correlated with higher award amounts. This may indicate that providers requesting higher payment amounts tend to select IDR entities that most frequently rule in their favor.”
- “For example, in the fourth quarter of 2025, Island Peer Review Organization (iPRO) ruled in favor of providers in 99.4 percent of arbitrated disputes. In these disputes, iPRO granted a median award of 601 percent of QPA, well above the median for all disputes. Conversely, Medical Evaluators of Texas ruled in favor of providers in only half (54.5 percent) of their arbitrated disputes, with a much lower median award of 159 percent of QPA, the lowest among all IDR entities.”
Excessive costs from IDR undermine safeguards designed to lower costs for employers and millions of Americans.
- “These marked and fast-growing trends suggest that the NSA is adding to, rather than reducing, health care costs. While the NSA protects consumers who receive out-of-network care from surprise medical bills, ever-increasing IDR costs will likely lead to cost increases for consumers in other ways.”
- “In the short term, higher plan spending on IDR may lead plans to offset spending with higher premiums. In the longer term, if providers continue to obtain high IDR awards, employers and plans may take other steps to try to reduce health care costs, including further raising premiums, increasing patient cost sharing, narrowing provider networks, and restricting wage increases.”
- “At the same time, providers could try to leverage IDR success in obtaining higher payments in one of two ways. Some providers may prefer to stay out of network and use IDR to get higher out-of-network payments. Other providers may leverage the threat to leave the network and use IDR to get higher negotiated rates for in-network services. Both strategies have the potential to push plan spending and premiums upward.”
Employers and employees are already paying the cost of IDR misuse. It’s time for Congress and the Trump administration to rein in the bad actors and set real guardrails on the provider-driven waste, fraud and abuse with IDR. To learn more, click here.
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